Your Deed is Not Your Title

January, 24 2018

When you purchase a home, you often hear the terms deed and title used interchangeably, but they are in fact two different things. Mixing these two things up could lead to trouble in the future, so having a clear understanding of is important. Let’s look more closely at the differences between a deed and a title, and at some complications that could arise if you don’t understand the difference.

What is a Deed?

A deed is a legal document that transfers ownership and rights to property from one person to another. Deeds are drafted, printed, and signed and legally give ownership rights from the seller to the buyer. A deed can include all rights or just some rights to a particular piece of property. For example, if oil is found under a piece of property, the owner of the property may or may not have the rights to it based on the details outlined in the deed during the purchase of that property.

What is a Title?

While a deed is a legal document that is written, printed, and signed, a title is a concept of ownership. The title may or may not include certain aspects of ownership. Using our example from before, your title may or may not include the rights to oil found under your new land.

Why Do I Need to Know the Difference?

Without understanding the difference between a deed and title, you could be at risk for a misunderstanding about your new piece of property. For example, if you do not understand the specific rights lined out in the deed, you may mistakenly believe you have the title to all aspects of your property. In our oil scenario, you could mistakenly think you have the right to any oil on the property, because you hold the title to the property. But in reality whether you have that right or not is outlined in the deed.

Understanding the distinctions between a deed and title is an important part of purchasing property. By working with a reputable title company, you can rest easy knowing that they have made sure your title is clear and that you understand any stipulations of the deed. A title company can also provide insurance for you as the buyer should something unexpected turn up on the property. If you are in need of a title company, call us at Armour Title Services today to discuss what we can do for you!